Cryptocurrencies like Bitcoin allow cybercriminals to fly under the radar when making and receiving payments for illegal goods and services, enabling crimes like ransomware to thrive.
But as major cryptocurrency exchanges now operate in much the same way as financial institutions, with the requirement to follow know your customer (KYC) and anti-money laundering (AML) regulations, they are no longer a safe haven for hackers. As a result, ‘gray’ cryptocurrency exchanges have sprung up which don’t abide by these rules, and actively market themselves to cybercriminals as a way of laundering and exchanging their crypto.
Recently, nine gray cryptocurrency exchanges were seized, which has led to a rise in simple peer-to-peer (P2P) exchanges hosted on platforms like Telegram, which offer affordability, anonymity, and minimal technical requirements. One example is a Russian-language Telegram-based exchange that explicitly avoids AML and KYC regulations, allowing anonymous transactions between cryptocurrencies and fiat currency without logging or verification. These exchanges are increasingly lucrative for providers, offering higher commissions than centralised exchanges. And, as these P2P exchanges are high in number and occur in obscure corners of the internet, they are much harder to crack down on.
